Greece's Future Could Be Decided On March 12

Markets have been relatively calm recently after some
unprecedented actions by the European Central Bank and headlines
appearing to confirm that Greece is likely to get its second
bailout.

However, that second point is still arguable—and will likely be
decided on March 12.

That's the deadline for private sector bondholders to register to
take part in the bond swap deal, determining the level of
participation and whether or not Greece will go through with the
deal at all.

If Greece receives less than 75 percent voluntary participation
in the bond swap, it said it will not go through with the deal
and will likely experience a disorderly default when €14.4
billion ($19.3 billion) in bonds come due on March 20 (although
those debts have a seven day grace period, so effectively March
27). That would greatly aggravate the likelihood of a Greek
exit from the eurozone.

On the other hand, the likely scenario—75 to 90 percent
participation—means Greece will continue to be the naughty child
of Europe, increasing internal pressures as recession deepens and
the conditions on the ground become untenable.

Analysts generally agree that the prognosis for Greece with
continued austerity is pretty grim, and that it will cause the
Greek government to continually miss its deficit targets and thus
face more pressure from a German-led eurozone. Eventually, and as
the violent protests we've already seen indicate, Greek citizens
won't be able to put up with poverty and despair. Greece's
continuing submission to EU whims means that angst is only likely
to increase.

A Gallup poll released in December showed that
60 percent of Greeks polled are struggling, 25 percent are
suffering, and only 16 percent are thriving. That puts Greece
among the ranks of Hungary, Romania, and Bulgaria—countries
generally thought to be among the more volatile EU nations.

While we're not saying that drastic political upheaval is in the
works, Greeks' quickly deteriorating standard of life might
indicate that stronger action to reclaim economic stability could
be. And if politicians remain too scared to do something about
this, then it's probable that the general populace will.